As Airbus, Boeing cut production, Indian suppliers follow suit

Aircraft manufacturers Airbus and Boeing have cut production, asking suppliers to also reduce deliveries by almost 50 percent.

In response to the coronavirus impact on the aviation industry, Airbus and Boeing have asked Indian vendors such as HAL, Dynamatic and Aequs Inc. to reduce production by one-third, the Hindu BusinessLine reported.

HAL produces doors for Airbus’ A320 aircraft and flaperons (which control a plane’s lift) for the Boeing 777 aircraft; Aequs makes 3,000 different types of products for the aircraft makers and Dynamatic supplies products for the Airbus A330 and A320.

A spokesperson for HAL told the paper the situation is being monitored and the company will make a decision on cutting production soon.

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Aravind Melligeri, Chairman and CEO of Aequs said they do not foresee any relief this year, adding that there could be layoffs.

A spokesperson for Dynamatic told BL production is being reduced by 30 percent – directly as a result of Airbus cutting production. Dynamatic is a tier-I supplier for Airbus.

Airbus, which posted $552 million loss for Q1FY21, has reportedly informed vendors it is slashing production by half to 30 aircraft per month – for which suppliers would have to pull back supplies by 40 percent.

In internal communication, CEO Guillaume Faury said the company is “bleeding cash at an unprecedented speed.” The company has shut factories in many countries including the US and has laid-off at least a dozen subcontractors.